Different Types of Payment Modes for E-commerce

If you plan to set up an e-commerce business, you need to determine the type of payment method that will be best suited for your enterprise. While there are several options to choose from, some help maximize revenue gains.

Some of the different types of payment methods to choose from include:

Credit Cards: These are the most popular and common mode of payment used by customers when shopping online. An online vendor can gain access to an international market through the integration of a payment gateway on its website to be used for payments by credit cards. Credit cards are the most popular in North America, Europe, etc.

Mobile Payments: These are popular in nations that have low banking or credit card penetration, and are a swift solution for customers to make purchases from e-commerce sites. These are commonly used for dating sites, social media platforms, gaming portals, etc. The customer has the facility to make payments through an SMS facility. This is more commonly in use in the Asia Pacific region.

Bank Transfers: Those customers that enroll for Internet backing have the facility to a bank transfer when they make any purchase online. One of the most significant advantages of using a bank transfer is that every transaction requires the customer’s approval and authentication. Only after has the customer approved the transaction will the purchase take place.

E-wallets: E-wallets are growing in popularity and are used to store the customer’s funds and personal data, which are needed to make online purchases. Getting enrolled for an e-wallet is swift and simple, with the customer requiring submission of relevant information just once. Another benefit of an e-wallet is they can work in coordination with mobile wallets using smart technology like Near Field Communication (NFC) devices. All it needs is to tap on an available NFC terminal, and the funds get instantly transferred. Powercash is an excellent example of this type of technology that gains popularity across the US and Europe.

Prepaid Cards: These are used by customers that don’t have bank accounts or minors as an alternative payment method. They come in different values as per the customer’s needs. It’s a preferred mode of receiving payment among online gaming companies. They accept payments in the form of virtual currency that’s stored on prepaid cards and used for gaming transactions. One of the primary factors that influence the use of prepaid cards seems to be the age of the customers, above other factors as per research.

Direct Deposit: Customers make a direct deposit transaction when they send instructions to banks to transfer funds from the bank account to make an online payment. For this, the customer will update the banks as to when to disburse the payments and the sum from their bank account. Generally, a scheduled date for payments is fixed. Direct deposit types of payments are used for monthly subscription services likes Netflix, Amazon Prime, etc.

Cash: This is the most widely used for cash-on-delivery and the purchase of physical goods. While it’s convenient, it does have the risk of getting stolen, among other threats.

These are the various types of payment modes that can be used for e-commerce transactions. Understanding the niche audience, especially their location, can help to figure out the right kind of payment methods to adopt for your e-business.